Priya

New Delhi (PTI): Making its foray into the property market of southern India, real estate firm Omaxe will invest up to Rs 500 crore in the next 2-3 years to develop a residential project at Vishakhapatnam in Andhra Pradesh.

The national capital-based Omaxe has bagged a land deal on November 1 for 19.53 acres for about Rs 100 crore with Vishakhapatnam Urban Development Authority (VUDA).

"We will invest up to Rs 500 crore for the entire project, for which the land at Madhurwada has already been acquired," Omaxe CEO (Corporate strategy and Finance) Arvind Parakh said.

The company expects a realisation between Rs 900-1,100 crore from this project, which has a saleable area of 30 million sq ft, Parakh said.

"It will be a mid-income housing project with an average saleable amount of Rs 3,000 per sq ft," he said, adding the construction work would start in the next 2-3 months and be completed within 2-3 years. The project would constitute 1,500 -2,000 housing units.

On funding of the project, Parakh said it would be supported by internal accruals and sale of apartments.

Besides, the company is also scouting for different projects in other southern states as well.

Parakh said: "We are looking for projects in Bangalore, Pune and Hyderabad and talks are on. But nothing has been finalised yet."

Omaxe presently has a land bank of 3,270 acres. "The company has 150 million sq ft of saleable area, of which construction work is going on in 100 million sq ft."

Parakh further said Omaxe would foray into the infrastructure development sector by the end of the current fiscal. It has set aside Rs 200 crore for this purpose to start with.

In the last fiscal, the company reported a revenue of Rs 1,440 crore. It expects a turnover of up to Rs 2,700 crore in the 2007-08 fiscal.

"We expect a turnover of Rs 2,500-2,700 crore in this fiscal, where the profit margin should be between Rs 560-580 crore," Parakh said.